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The Student Loan Scam: The Most Oppressive Debt in U.S. History and How We Can Fight Back Paperback – February 1, 2010


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Product Details

  • Paperback: 184 pages
  • Publisher: Beacon Press (February 1, 2010)
  • Language: English
  • ISBN-10: 0807042315
  • ISBN-13: 978-0807042311
  • Product Dimensions: 0.6 x 5.3 x 8.1 inches
  • Shipping Weight: 9.6 ounces (View shipping rates and policies)
  • Average Customer Review: 4.7 out of 5 stars  See all reviews (33 customer reviews)
  • Amazon Best Sellers Rank: #832,003 in Books (See Top 100 in Books)

Editorial Reviews

From Publishers Weekly

Think credit-card debt is a problem? Take a look at the lives ruined through the corporate thug tactics, usurious fees and vicious harassment employed by some of the nation's largest student-loan providers in this shocking exposé from Collinge, founder of StudentLoanJustice.org. The author had a manageable $38,000 in loans—until he missed a single payment. Fees and charges quickly piled up, and his debt mushroomed to more than $100,000. The author reveals that since lenders make far more money from defaulted loans than they do from borrowers in good standing, they go to extraordinary—and illegal—lengths to force borrowers into default. There are currently more than five million defaulted loans on record, and incredibly, student loans are the only type of loan in U.S. history to be nondischargable in bankruptcy. The author exposes the engineers (and profiteers) of this predatory system and urges Congress to restore standard consumer protections to student loans, concluding with a call to arms for progressive changes, refinancing rights and a plethora of practical advice for borrowers. Comprehensive and stirring, this extraordinary book is whistle-blowing at its finest. (Feb.)
Copyright © Reed Business Information, a division of Reed Elsevier Inc. All rights reserved. --This text refers to an out of print or unavailable edition of this title.

From Booklist

Collinge is a writer and political activist committed to convincing Congress to restore standard consumer protections to student loans. His devotion to the student-loan cause is prompted by his terrible experiences arising from $50,000 in student loans from Sallie Mae at graduation in 1998 that were subsequently deemed in default, and with interest and penalties, the balance due in mid-2005 mushroomed to $103,000. We learn that Sallie Mae, the dominant student loan company in the U.S., was initially a government-sponsored entity until it was privatized in 1997. Its success stems from its large lobbying influence in Congress and its extensive university agreements whereby schools profit when their students borrow from Sallie Mae. The author’s solutions include a need for bankruptcy protection on student loans that Sallie Mae supports, and he concludes with practical advice for borrowers, including always using federal loans before private loans. Although everyone may not agree with Collinge, he has a valuable perspective for library patrons and their families as they consider funding options for education. --Mary Whaley --This text refers to an out of print or unavailable edition of this title.

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Customer Reviews

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Read this book and learn the pitfalls that are waiting for you!
Frederick S. Goethel
This book is so on-point with the student loan business that its scary.
Web Lady
Educate yourself by reading this book prior to making your decision.
Julianne van Leeuwen

Most Helpful Customer Reviews

52 of 52 people found the following review helpful By Frederick S. Goethel VINE VOICE on December 27, 2008
Format: Hardcover Verified Purchase
My daughter is in her senior year in high school and I am trying to learn as much about the various mechanisms available to finance her education as I can. I was really stunned to read about all the problems with student loans and how Congress has given the banks and loan guaranty organizations a free ticket to extract as much money from students as possible.

Some of the actions of our government include making student loans the only loans available that cannot be discharged through bankruptcy, allowing the loan companies and guarantee companies to own the collection agencies, which provides to them an incentive to allow (and push) the student to default, being able to attach Social Security retirement and disability income for repayment, allowing interest rates to be as high as 29.9% and a host of other goodies.

The stories in this book will cause you to cringe. The author does name names and lets you know who has been a friend to student's and their families and who has been bought by the loan companies PACs. In addition, you will learn about the various pitfalls and tricks used by the loan companies to increase the profit margin on these loans.

While the writing is a little redundant, it generally is a well written book that contains crucial information for anyone who has a student loan or for the families of anyone considering taking out a loan. Read this book and learn the pitfalls that are waiting for you!
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40 of 42 people found the following review helpful By Loyd E. Eskildson HALL OF FAME on May 19, 2009
Format: Hardcover
Collinge argues that student loans have become the most profitable, uncompetitive, and oppressive type of debt in American history. This has occurred in large part due to legislation passed since the mid-1990s that removed stand consumer protections from student loans, and allowed for massive penalties and draconian mechanisms to collect these inflated debts.

Americans borrow almost $90 billion/year to attend college. About 2/3 of college students require loans to make it through, and typical undergraduate borrows leave school with over $20,000 in student loan debt, $42,000 for graduate students. Student-loan holders can garnish a borrower's wages, tax returns, Social Security, and disability incomes - without a court order. Defaulted loans do not qualify for forgiveness for eg. teaching in under-served areas.

Federal loan limits, with protections, are $8,500/year for graduate students.

Fortune magazine called Sallie Mae the second most profitable company in 2005, and its CEO topped the list of highest paid CEOs in D.C. Sallie Mae's (major student loan provider) fee income increased 228% between 2000 and 2005, while its loan portfolio rose only 82% - the difference was penalties and fees from defaulted loans. As of 2007, Sallie Mae's top two executives together made more than 500 million. Universities often have "preferred-lender" arrangements with the universities and receive kickbacks. In 1999 Sallie Mae purchased Nellie Mae, followed by USAGroup and Southwest Student Services (nonprofit student loan companies and guarantors).

The national average interest rate is 12% for private student loans. Student loans are the only type of loan in U.S. history to be non-dischargeable in bankruptcy.
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24 of 24 people found the following review helpful By goodstuff on November 10, 2009
Format: Hardcover
If you take out a student loan in the US today, you are walking the edge of a volcano.

If you slip (and it doesn't take much to slip), you could end up little more than an indentured servant, owing 2x or 4x or more what you originally borrowed. Your wages, tax refunds, social security payments, even disability payments will be garnished from now until the end of time. Chances are slim you'll ever be able to pay it off, because the allowable fees and penalties on a student loan are impossibly huge. At the whim of the student loan companies, you can have your professional license yanked or be forced out of public employment. Did I mention debt collectors don't need to follow fair collection practices because it's a student loan? Oh and forget about discharging it through bankruptcy... it's a student loan... not allowed.

Every page of this book reveals jaw-dropping, horrifying facts of how the student loan industry put Congress in their pocket and began a massive wealth transfer (from student loan borrower to them) that has resulted in some student loan executives earning 500 million dollar salaries. The saddest part of this is not only the individuals who suffer due to this; it's all of society because we need a well-educated workforce to prosper, and the student loan industry is making that more and more impossible.

I highly recommend this book and think it would be a very good choice for a discussion group.
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38 of 43 people found the following review helpful By M. Okada on March 1, 2009
Format: Hardcover
Readers may already be familiar with Alan Collinge from his website [...] or his appearance on "60 Minutes" two years ago in a piece about the student lender Sallie Mae and the way that it has destroyed the lives of many college graduates by burdening them with exorbitant fees and finance charges on their student loan debts. College is the riskiest and perhaps the most foolhardy investment anybody can make, as student loan debts can NEVER be erased with bankruptcy. Warning to parents: NEVER cosign on a student loan. Many parents are facing financial ruin because they cosigned on a student loan for a child. This 150 page book examines the huge student loan industry and how it derives colossal profits by destroying peoples' lives.

Chapter 1 - "The Rise of Sallie Mae and the Fall of Consumer Protections" -How Sallie Mae became a vertical corporation with control of all aspects of student loans: issuing loans, guarantees, and collections. In 2002 it purchased Pioneer Credit Recovery, a student loan collection company. It lobbied Congress for laws that permitted huge penalties and fees for defaulted debt.

Chapter 2 - "Who Benefited" - The huge salaries of Albert Lord, CEO of Sallie Mae, and other executives in the industry. Reveals that Edfund, a "guarantor"--is just another entity that relentlessly extracts money from debtors.

Chapter 3 - "Collection Abuses" and Chapter 4 "The Borrowers" - Readers may have already heard some of these stories from[...]. One particularly sad story is a graduate of Illinois State University who committed suicide after completing his master's in chemistry because his student loans had grown to $100,000. Many student debtors report being called several times every day by Sallie Mae loan shark collectors.
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